Find out about the advantages and disadvantages when paying for goods through the bank, using standing orders and direct debits.

Standing Orders

A standing order is an instruction to a bank to pay an agreed amount of money to another bank account/company/person on a particular date or time. The standing order will normally pay out the same amount of money on a regular basis, weekly, monthly or annually.

Advantages

Your bills can be paid automatically,

You can tell the bank how much money to pay and when,

You can cancel the standing order whenever you want to.

Disadvantages

You have to make sure that there is enough money in your account to pay the bill or the payment will be refused. You may also get charged by your bank if you don't have enough money for the standing order.

You have to be careful to remember when the money will be taken out by the bank.

You can get a standing order form from your bank to complete and hand in.

Direct Debits

A direct debit is similar to a standing order, but there is one difference. With direct debits you instruct the bank to allow the company or organisation who presents the direct debit to say how much money will be taken from your account and when.

Advantages

The bills are paid automatically.

The company who charges you will be able to vary the amount of money that they take, depending on how much you owe them.

Disadvantages

You have to make sure that there is enough money in your account to pay the bill or the payment will be refused.

You have to remember that a varied amount of money will be taken out of your account when the company presents the direct debit to your bank.

This can be useful when paying mobile phone bills, electricity bills or credit card bills as the amount you pay will vary with each bill and so a direct debit will enable you to pay the various amounts without having to tell your bank to do anything.